Moving from spreadsheets to accounting software before MTD
You are not obliged to abandon your spreadsheet. But the honest comparison is not spreadsheet versus £19 a month — it is spreadsheet plus a bridging tool versus software that, for a lot of people, costs nothing at all.
Last verified 31 July 2026. Prices are ex VAT and taken from each vendor’s own UK pricing pages. Promotional offers change roughly monthly and are normally for new customers only — check the live price before you subscribe.
A spreadsheet on its own cannot send anything to HMRC. Under Making Tax Digital you would need bridging software between the spreadsheet and HMRC, and your records still have to meet HMRC’s digital record-keeping requirements. That route exists and it works for some people — but with full accounting software available from £0, most sole traders and landlords are better off moving properly.
Not tax advice — confirm with HMRC or your accountant
This article is general information for UK businesses, not tax advice. Making Tax Digital thresholds, dates and rules are set by HMRC and can change. Before you act on anything here, confirm your own position on GOV.UK or with a qualified accountant.
Bridging software: the option that keeps the spreadsheet
Bridging software is a filing bridge, not a bookkeeping system. It takes figures out of your spreadsheet and submits them to HMRC. It does not give you bank feeds, reconciliation, invoicing or receipt capture.
It exists because HMRC’s rules did not set out to outlaw spreadsheets — they set out to make records digital and submissions automated. A spreadsheet is digital. What it cannot do is talk to HMRC, and bridging software fills exactly that gap and nothing else.
That narrowness is the whole story. You keep your spreadsheet and everything you like about it, and you keep everything you dislike about it too:
What bridging software preserves
- Your existing spreadsheet, with its layout, formulas and years of history intact
- Zero re-learning. If you are fluent in Excel or Sheets, you stay fluent
- Full control of structure. No vendor’s chart of accounts imposed on you
- A genuinely low ongoing cost if your bridging tool is cheap and your volumes are tiny
What it does not solve
- No bank feed. Every transaction is still typed in by you
- No reconciliation. Nothing checks your figures against the bank
- No receipt capture and no invoicing
- Formula risk. A broken cell reference is a filing error nobody flags
- Two tools to maintain instead of one, with a handoff between them
- No prompting. The deadline calendar is entirely yours to track
Check the rules, not this article
Exactly what HMRC requires of spreadsheet-based records — including digital linking between the spreadsheet and the submission — is set by HMRC and is more detailed than a blog paragraph can safely summarise. Read the current requirements on GOV.UK, and see our MTD and spreadsheets page for the longer treatment.
Why most people are better off moving properly
Under annual Self Assessment a spreadsheet only had to be right once a year. Under quarterly reporting it has to be right all year — and that is the workload that makes bank feeds and reconciliation worth having.
The old rhythm allowed a very forgiving pattern: ignore the books for eleven months, reconstruct them in a fortnight, file, forget. Quarterly reporting removes that option. You are reporting while the year is still running, so the records have to stay current throughout — four times over, every year, for as long as you are in scope.
That changes what the tooling is for. A spreadsheet is a good place to store numbers you have already worked out. Accounting software is a good place to stop numbers going wrong in the first place:
- The bank feed does the data entry. This is the single biggest reduction in work available, and bridging software does not offer it.
- Reconciliation catches your mistakes. A spreadsheet will happily hold a duplicated invoice and a missing payment forever. Reconciled software will not.
- Receipts attach to transactions. No January shoebox.
- The software tracks your obligations. You are not managing the HMRC calendar out of your own head — see what you actually submit in a quarterly update.
- It grows with you. VAT registration, a second income source, an employee — all plan changes, not migrations.
A spreadsheet stores the answer. Accounting software stops you getting it wrong. Under quarterly reporting, the second one is worth more.Fizoral
Who genuinely should stay on a spreadsheet
Not everyone should move, and it would be dishonest to pretend otherwise. Staying put is defensible if all of these are true:
- You have a handful of transactions a month, not hundreds
- Your affairs are stable — one or two properties, or one simple trade
- You are not VAT registered and do not expect to be
- Your existing spreadsheet already works and you keep it current
- You are comfortable owning the deadline calendar yourself
If one of those is false, the case for moving gets strong quickly.
What moving actually costs
Full accounting software starts at £0. FreeAgent is free permanently with a NatWest, RBS, Ulster Bank or Mettle account, and Sage has a genuinely free sole trader tier. Paid entry plans run from £186 to £399 over 24 months.
This is why the “spreadsheets are cheaper” instinct so often fails on inspection. The floor of this market is not £19 a month. For a large number of people it is nothing.
- —FreeAgent via NatWest / RBS / Ulster Bank / MettleFull product, free while you hold the account. Mettle needs 1 transaction a month.£024 months
- —Sage Sole Trader Free5 invoices a month, non-VAT only£024 months
- 1QuickBooks Sole Trader£10/mo after 6 months at £1. Cannot file VAT.£18624 months
- 2Xero Ignite£16/mo after 6 months at £3.20£307.2024 months
- 3Sage Accounting Start£18+VAT/mo after 3 months free£37824 months
- 4FreeAgent Sole Trader, paid directly£19/mo after 6 months at £9.50£39924 months
Ex VAT, verified 31 July 2026. Sage quotes +VAT and is normalised here. Promotions change roughly monthly and are normally for new customers only. Every paid figure is the post-discount total — see the discount cliff.
Two caveats worth carrying into the decision. Sage Sole Trader Free is non-VAT only and capped at five invoices a month. QuickBooks Sole Trader cannot file VAT either — if registration is on your horizon, read registering for VAT? Your software choice just changed first.
And on MTD compatibility: it is not a tiebreaker. Xero, QuickBooks, FreeAgent and Sage are all on HMRC’s recognised list. Any vendor selling you MTD readiness as a feature is selling you the industry baseline.
How to choose, and how to move
Choose on total cost over 24 months, on whether your bank makes one of them free, and on whether the plan can still do the job in eighteen months. Then move at a clean period boundary with one practice period in hand.
Choosing
- Check your bank. NatWest, RBS, Ulster Bank or Mettle means FreeAgent at £0. Start there and only move on if it does not fit.
- Check VAT. Registered or likely to be? Rule out QuickBooks Sole Trader and Sage Sole Trader Free before you compare anything else.
- Price 24 months, not month one. Six months of promotion plus eighteen months of standard rate.
- Ask your accountant. If they work in one package daily, the friction saved is usually worth more than the price difference.
- Look one tier up. If payroll or a second income source is coming, check what the next plan costs before you commit to the entry one.
Moving
- Pick a clean cut-off. The start of a tax year or accounting period. Never mid-quarter if you are already in MTD.
- Set your opening position at that date — balances, outstanding invoices, unpaid bills.
- Connect the bank feed first. It is the thing most likely to be fiddly and the thing that saves the most time.
- Build categories that match your trade, not the vendor’s default list. Do this once, properly.
- Run one full period in parallel. Spreadsheet and software side by side. If the two agree at the end, you are ready.
- Archive the spreadsheet, do not delete it. It is your record of everything before the cut-off.
Leave yourself runway
If you are in the £30,000 cohort starting 6 April 2027, the parallel period needs to finish before then, not start then. That means choosing software months ahead, not weeks. See what the April 2027 threshold means for you.
Vendor pages: Xero UK · QuickBooks UK · FreeAgent · Sage UK.
Spreadsheets and MTD questions, answered
What people ask before they give up a spreadsheet that has worked for years.
Can I keep using a spreadsheet under Making Tax Digital?
Spreadsheets are not banned outright, but a spreadsheet on its own cannot send anything to HMRC. You would need bridging software to sit between the spreadsheet and HMRC, and your records still have to meet HMRC’s digital record-keeping requirements. Confirm the current rules on GOV.UK before you build a plan around it.
What is bridging software?
Bridging software is a tool that takes figures from a spreadsheet and submits them to HMRC, so the spreadsheet can stay as your book of record. It is a filing bridge, not a bookkeeping system — it does not give you bank feeds, reconciliation, invoicing or receipt capture.
Is bridging software cheaper than accounting software?
Sometimes, but the gap is smaller than people expect and it is not always a saving at all. Full accounting software starts at £0 — FreeAgent is free with a NatWest, RBS, Ulster Bank or Mettle account, and Sage has a free sole trader tier capped at 5 invoices a month and non-VAT only. Against £0, a bridging tool has to justify itself on something other than price.
Who should stay on a spreadsheet?
The case is strongest for a very small, very stable operation — a landlord with one or two properties, a handful of transactions a month, an existing spreadsheet that already works, and no VAT. Even then, quarterly reporting means the spreadsheet has to stay current all year rather than being reconstructed each January.
What does moving from spreadsheets to accounting software involve?
Pick your software, set your opening position at a clean cut-off date, connect the bank feed, set up your categories to match how you actually trade, then run one full practice period in parallel before you rely on it. Keep the old spreadsheet as an archive rather than deleting it.
When is the best time to switch?
A clean boundary — ideally the start of a tax year or an accounting period — so you are not splitting a period across two systems. If you are already inside MTD, avoid switching mid-quarter. And leave enough runway to run a full practice period before anything is live.
Read next
Up to both pillars, across to the sibling posts, down to the shortlist and the reviews.
Up — pillar
Best UK accounting software, priced over 24 months
The solution silo: every entry plan, every promotion, every total, and a verdict by business type.
Up — pillar
Making Tax Digital for Income Tax: the full guide
The problem silo: thresholds, dates, who is in and what actually changes about your records.
Across — sibling post
What the April 2027 £30,000 threshold means for you
The live deadline, who it catches, and how much runway you have left to migrate.
Across — sibling post
What you actually submit in an MTD quarterly update
Four updates and a final declaration — the reporting rhythm your records have to keep up with.
Down — what to buy
Best accounting software for UK sole traders
The shortlist for people leaving a spreadsheet, priced over 24 months rather than over the discount.
Down — review
Xero review
Whether £307.20 over 24 months is justified once you no longer need convincing to leave Excel.